Unit 1-What is business? (1.2) Flashcards
What do the different forms of businesses include?
Sole trader
Private limited companies
Public limited companies
Private and public sector organisations
Non-profit organisation, such as charities and mutuals
What is a sole trader?
A business owned and run by one individual
Can sole traders employ others to operate with them?
Yes
Why are sole traders increasing popular?
People enjoy working for themselves and keeping all of the business profits.
Why are sole traders unincorporated?
The business has not gone through the legal incorporation process.
Define unincorporated.
(of a company or other organization) not formed into a legal corporation.
Do sole traders have limited or unlimited liability?
Unlimited liability
What is unlimited liability?
Where the owners of a business are liable for all the debts that the business may incur (sole trader and partnerships).
What happens if businesses who have unlimited liability u=incur debts that cannot be repaid?
The owner’s personal assets are at risk as there is no limit to their liability (responsibility-all theirs)
